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Poverty, justice and Christian love

MICHAEL MILLER writes that there are many problems with the way we engage questions of poverty both in the U.S. and abroad, but one underlying philosophical issue that is often neglected is that we have replaced charity with humanitarianism, a hollowed-out secular and materialist vision of Christian love. We need a more human vision of Christian love . . . 

Michael M. Miller

Michael M. Miller

Concern for the poor is at the heart of Christianity. Saint John Paul II called poverty one of the greatest moral challenges of our time, and to ignore the plight of the poor has consequences for our eternal souls.

Pope Francis addressed poverty in Evangelii Gaudium: “Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us; we are thrilled if the market offers us something new to purchase. In the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us” (#54).

The consequence of apathy in the face of suffering is seen clearly in the parable of Lazarus and the rich man. In his commentary on this passage, St. Augustine notes that it was not his great wealth that sent the rich man to hell, it was his indifference. He just didn’t care. He ignored the poor man.

Care for the poor is not simply a question of charity, it’s also a question of justice. We are called to help the poor, but at the same time, we’re not called just to “do something.” Having a heart for the poor is not enough. We also need a mind for the poor. Our charity and justice must be ordered by reason and oriented to truth.

Pope Benedict writes in Caritas in Veritate: “Only in truth does charity shine forth, only in truth can charity be authentically lived. Truth is the light that gives meaning and value to charity. That light is both the light of reason and the light of faith. Without truth, charity degenerates into sentimentality” (#3).

This means our charity and our hunger for justice must be rooted in the virtue of prudence. German philosopher Josef Pieper defined prudence as seeing the world as it is and acting accordingly. This is why prudence is often called the mother of the virtues, because we can’t be just or brave or temperate if we don’t see the world as it is and act accordingly.

Prudence is especially important when we try to help the poor. Saint Thomas Aquinas reminds us that justice can be destroyed in two ways: not only by “the violent act of the man who possesses power,” but also by the “false prudence of the sage.” Imprudent charity can actually increase injustice. Sometimes our help can actually make things worse.

There are many problems with the way we engage questions of poverty both in the U.S. and abroad, but one underlying philosophical issue that is often neglected is that we have replaced charity with humanitarianism. What is the difference? Humanitarianism focuses primarily on providing comfort and meeting the material needs of people, but this is only a small part of charity. Humanitarianism limits its horizons to the material, and thereby misses the creative capacity, inherent dignity, and eternal destiny of man.

Humanitarianism is a hollowed out secular and materialist vision of Christian love. It is a bad copy. Yet even Christian organizations often operate under a humanitarian model. As Pope Francis has warned, the Church is not supposed to be just one NGO (nongovernmental organization) among many.

Charity, on the other hand, comes from the word caritas in Latin or agape in Greek. Charity is Christian love. To love is to seek after the good of the other. That means that while good works and care for the poor are an essential part of charity, they are not the whole thing.

To desire the good of the other ultimately means promoting and encouraging human flourishing, all the while keeping the eternal destiny of the person in mind. Does this mean Christian charity does not care about material needs? Of course not, but it realizes this is not enough. The provision of material needs should be at the service of promoting human flourishing, helping the person to become all God has called him to be.

Ideas do indeed have consequences, and the shift from humanitarianism back to a richer and more human vision of Christian love changes the way we engage with the poor — not simply as objects of our charity, but as the subjects and protagonists of their own story of development.

It also makes us less focused on ourselves and more focused on the people we are trying to help. Pope Francis has exhorted us to be on the front lines with the poor. It is time for a revolution in charity — in thought and in deed.

MICHAEL MATHESON MILLER is a research fellow at the Acton Institute, the director of PovertyCure and host of PovertyCure DVD Series.

Reforming capitalism for freedom

MICHAEL M. MILLER writes that our economy needs serious reform — business as usual is not acceptable. However, a correct diagnosis of the problem is in order before making significant changes. He also argues that the free market requires serious moral restraint — especially on the part of those with power like big businesses and government  . . . . 

Michael M. Miller

Michael M. Miller

In the wake of the financial crisis, one of the recurring themes among business and political leaders is the need to reform capitalism and create new ways to think about business and the role of profit.

The common narrative is that “business as usual” doesn’t work. We’ve tried the free market and while it made money for some, it also caused the housing boom, the financial crisis, and created a society where all that matters is making as much profit as possible. The financial crisis is calling us to come up with new models of how we should arrange the economy. There are two issues here: first, a new way of looking at business and second, the reform of the current economic system. Let me address both, beginning with business.

It’s good that business leaders are making an effort to understand that business is about more than just profit. Profit is important, of course, but as Blessed John Paul II reminded us, profit is not the main purpose of business. The main purpose is to serve human needs and wants. Profit is one of the indicators that reveals whether you are meeting those needs.

I also agree that business as usual is not enough. We’ve had some serious moral crises in business from fraudulent accounting to big banks colluding with the government to receive special bailouts. What’s more, business is not outside the requirements of morality. Most corporate social responsibility programs have a serious flaw — they are relativistic. You can’t build a culture of business ethics if there is no truth and no right and wrong. Though mainstream business leaders rarely talk about it, business has the moral and social responsibility to cultivate a healthy moral ecology. This means honesty and obeying the laws; it also means respecting families and not exploiting women to sell products.

Let’s move to the issue of reforming the economy. There is incessant talk about the need to reform capitalism, but my first question is: What do we mean by capitalism? Unfortunately, the term “capitalism” has become proxy for “that which is bad” and often becomes a substitute for the sins of greed and avarice. There’s another problem — and a more serious one. In common parlance word “capitalism” is usually identified with a free-market economy both by its detractors and defenders. But capitalism and the free market are not always the same thing. There are many different varieties of capitalism: oligarchic capitalism, corporate capitalism, crony capitalism, managerial capitalism, and free-market capitalism to name a few.

Most of the critics of capitalism lament so-called “market fundamentalism” or “unfettered markets,” but we don’t have anything of the sort. What we have in the U.S. is a type of managerial-crony capitalism where big business and big government collude to make regulations that serve their interests. When things went wrong with our managerial capitalist system, instead of assigning blame correctly we blamed this mythical free market.

Our economy does need reform, but if we are going to address a problem we have to identify it correctly. The problem is that our diagnosis is wrong. The source of the financial crisis was not “market fundamentalism” but a complex interrelationship of government regulation, lobbying by interest groups, the manipulation of interest rates and the money supply, big business and government collusion, and political and social policy all mixed in with age-old vices like greed and imprudence.

There is a tendency to think that the default position of capitalism is a free market and that regulations and government interventions are necessary to resist this return to what is called “unfettered” or “savage” capitalism. But this is a serious misconception. In practice, the free market requires serious moral restraint — especially on the part of those with power like big businesses, government and interest groups. They have to exercise restraint and virtue not to use their power to gain an unfair advantage by colluding or lobbying the government for protection. One of the most important, though often neglected, elements of authentic corporate social responsibility is for companies to help maintain and encourage a free and competitive economy that enables entrepreneurs to compete — even if this means a possible loss to their own business. Too often companies, once they become successful, look to government to undermine the free and competitive economy that they benefited from.

Free economies are like free societies. As William Allen said well, you cannot have self-government without self-governors. In the same way you cannot have a free economy without free and virtuous people. A real free and competitive market, to use Lord Acton’s line, is “the delicate fruit of a mature civilization.”

MICHAEL M. MILLER is a research fellow at the Acton Institute and director of PovertyCure, which promotes entrepreneurial solutions to poverty in the developing world.

Community, liberty and freedom

Michael Miller writes that the battles for religious liberty are only beginning. Americans are faced with the choice of being governed by its citizens or surrendering the culture to a massive, uncaring government bureaucracy. He argues that one of the ways we can have the strength and integrity to stand up is by not being dependent upon taxpayer dollars . . .

Michael M. Miller

I’ve been thinking lately that much of the division in America about the role of the state, the Church, the family, and religious liberty comes down to a clash between the intellectual visions of two Frenchmen: Alexis de Tocqueville and Jean Jacques Rousseau.

Many of the differences can be boiled down to what we mean by community. Rousseau’s vision of community is what the sociologist Robert Nisbet called the “political community.” For Rousseau, the two main elements of society are the individual and the state. All other groups — including the Church — are viewed as inhibiting individual freedom and detracting from political community that is found in the state.

Tocqueville’s vision of community, on the other hand, is not reduced to the “political community” but instead means a wide variety of associations, different levels of groups, and layers of authority. Society is not made up of autonomous individuals and an omnicompetent state, but is a diverse group of overlapping associations like families, churches, schools, and mutual-aid societies.

Tocqueville worried that democracies could slide into what he called “soft despotism.” He said that this type of despotism “would be more extensive and milder and it would degrade men without tormenting them.” In Democracy in America, he wrote: “I see an innumerable crowd of like and equal men who revolve on themselves without repose, procuring the small and vulgar pleasures with which they fill their souls. Each of them, withdrawn and apart, is a stranger to the destiny of others.”

Over this multitude a massive government exists, “which alone takes charge of assuring their enjoyments and watching over their fate. It is absolute, detailed, regular, far-seeing, and mild. It provides for their security, foresees and secures their needs, facilitates their pleasures, conducts their principal affairs, directs their industry, regulates their estates, [and] divides their inheritances.” He says it would be like a father. But unlike a father, the state doesn’t want citizens to grow up; it wants to regulate and manage all their little decisions, even though the external forms of freedom remain.

He wrote this in the 1830s and his words today are prophetic. Think, for example, of President Obama’s “Life of Julia” campaign, where he envisions that big government is there to assist us at every stage of our lives. What was supposed to be a social safety net has become the social fabric of our lives.

Tocqueville believed that the way to counter the rise of soft despotism was to encourage people to get involved in their communities — and to work with their neighbors to solve problems rather than relying on the state. This requires active local politics, a rich diversity of private associations, and of course, religion. Religion, religious institutions, schools, and ministries play a central role in creating the conditions for freedom and resisting soft despotism. Religion helps fight the negative forces of “love of comfort” and “individualism” by providing an eternal perspective.

Intellectually, Christians need to be aware of these two visions of community and what they mean. We should reject the Rousseauian vision of community and adopt Tocqueville’s, where a diversity of organizations possess the local and appropriate knowledge to help those in need. His idea is similar to the Catholic social doctrine of subsidiarity. Subsidiarity not only limits the role of the state, but it enables authentic human interaction. The Church (this means us) needs to think creatively to provide local solutions to social issues.

From this, I believe that in our current political and cultural situation, Catholic institutions should be wary of taking government money, which can end up making these institutions an arm of state services. The Church needs freedom to follow God’s laws and to live out its mission, preaching the gospel, getting souls to heaven, and helping to create the conditions for human flourishing. Clearly it’s not wrong to take government money, but in today’s climate — with an increasingly secular state hostile to Judeo-Christian teaching — I wonder if this is the most prudent course.

The battles for religious liberty are only beginning and the road ahead will be hard. One of the ways we can have the strength and integrity to stand up is by not being dependent upon taxpayer dollars. What vision of community do we want? Rousseau’s with a small, isolated, and so-called emanciapted individual over whom hovers the protective, watchful state — or Tocqueville’s vision of a rich diversity and layers of association where citizens can find something much better than raw, amoral emancipation: They can find human flourishing and human love.

Michael Matheson Miller is a research fellow and director of media at the Acton Institute. He is currently leading PovertyCure, an international network of organizations promoting enterprise solutions to poverty rooted in a Christian understanding of the human person.

The invisible sources of entrepreneurship

Michael J. Miller contends that certain criteria must be in place for entrepreneurs to take a risk and start a new business. They require specific institutional and cultural foundations, without which they don’t emerge. We take these criteria for granted in the West, but in developing countries the foundation for business to flourish is weak .  . . . 

Dr. Michael Miller

There is great enthusiasm for entrepreneurship these days. There are social entrepreneurs, intellectual entrepreneurs, educational entrepreneurs and even intra-preneurs (entrepreneurs within their own companies).

Entrepreneurs like Steve Jobs and Bill Gates are held up as model citizens. Magazines like Entrepreneur and Fast Company highlight a culture of entrepreneurship. President Obama even has an initiative dedicated to promoting it. In short, entrepreneurs are cool.

This is a generally a good development, yet I fear a superficial one. While there are dangers to some current images of the entrepreneur as a radical individual beyond good and evil like those portrayed in the film The Social Network, entrepreneurs do play an essential role in society and it’s good that we celebrate them. What is often lacking, however, is a requisite appreciation of the moral and institutional foundations that allow for a culture of entrepreneurship to develop.

Entrepreneurs don’t just pop out of nowhere. Nor are they a type of superman that transcends the culture around them. Rather they require specific institutional and cultural foundations, without which they don’t emerge. Look for example at the poor countries throughout the developing world. As Peruvian economist Hernando de Soto has noted, the developing world “is teeming with entrepreneurs.” So why do these countries remain so poor? It’s not as if the people lack an entrepreneurial spirit. What they lack are the foundations that allow them to develop their entrepreneurial capacity and convert them into successful, wealth-creating businesses.

Entrepreneurs take risks, they see opportunities that others do not, and they turn those opportunities into businesses. It’s perhaps counterintuitive, but this risk-taking actually requires stable social foundations. Entrepreneurs need to know that ground is solid before they risk a jump. These foundations include rule of law, clear private property rights, freedom of association, free exchange, and strong families and communities that encourage a culture of trust. In the West, we take these foundations for granted, like fish do water. But without them entrepreneurship would dry up. Let’s look at a couple of them.

Private property. Clear private property rights are essential for entrepreneurship. In some parts of the developing world over 50% of the land has no clear title. Without title people are reticent to make any improvements because their work could be taken from them. Without title they cannot use their land as collateral for a loan to start a business. Imagine how much entrepreneurship we would see in the U.S. if we weren’t sure who owned the land our business was on. Do you think we’d invest a lot of money into developing it? The Catholic Church has always stressed the importance of private property rights — and for more than economic reasons. In his defense of private property in Rerum Novarum, Pope Leo XIII stressed the important role property plays in allowing families the space to live out their freedom and responsibilities.

Rule of law. Rule of law is the opposite of the rule of men. It means that there are clear, transparent rules under which everyone operates. How many entrepreneurs would take the risk to start a new venture if they couldn’t be sure that the contracts would be enforced in a fair manner? Again, predictability and justice are prerequisites for risk-taking.

Free association. In his defense of the new mendicant orders, St. Thomas Aquinas argued in 1256 that freedom of association was a natural right. Leo XIII relied on this for his defense of unions in Rerum Novarum, and it applies to businesses, universities and other voluntary associations that make up civil society. When the rules and regulations make it difficult to start or maintain a business, it undermines both freedom and entrepreneurship. There is a high correlation between economic freedom and prosperity.

Free exchange. When people have the freedom to buy and sell in a market (assuming it is not something morally evil of course), it creates incentives for entrepreneurs to build businesses. When markets are restricted, it’s usually the largest companies with the biggest influence that lobby the government to protect their industries and keep out competition. This not only stifles small- and medium-sized businesses, it hurts the poor who lack political and economic influence.

Culture of trust. Market economies that enable entrepreneurs to take risks and flourish do not long succeed if built upon the radical individualist type of entrepreneur portrayed in The Social Network. Sustainable market economies require deep levels of trust and honesty, otherwise transaction costs increase and entrepreneurship decreases. This culture of trust and human virtues that underlie it are not created by the market economy itself. They are developed in strong families, a rich religious and moral culture, and a vibrant civil society.

These are the foundations of entrepreneurship. Business people need to lead by understanding, explaining and defending them. Entrepreneurship is part of the American spirit — it’s in our blood, but it won’t last without the institutional and spiritual capital that gives it life.

Michael Matheson Miller is a research fellow and director of media at the Acton Institute. He is currently leading PovertyCure, an international network of organizations which promotes enterprise solutions to poverty rooted in a Christian understanding of the human person.

Corporate social responsibility

Michael Miller contends that a free, entrepreneurial and competitive market economy is the best means to create prosperity and bring about widespread distribution of wealth. But a free economy requires private property, rule of law and free exchange. Equally important are moral virtues such as honesty, thrift, hard work, and a desire to serve others . . .

Dr. Michael Miller

Voltaire once remarked that the Holy Roman Empire was neither holy nor Roman. A similar thing could be said about the popular business ethics model of Corporate Social Responsibility (CSR): It’s neither about business nor ethics.

Popular CSR models neither appreciate the moral and social value of business nor do their emotivist and trendy schemes like environmentalism and diversity actually address the real ethical challenges and social responsibility of business in a commercial society. Yet unfortunately CSR is the dominant framework through which many business leaders think about their role in society. If we’re going to take ethics and social responsibility seriously, we need a more robust vision of business ethics.

CSR is attractive because it touches on a partial truth — businesses are not just renegade profit-making machines. But the current CSR model ends up undermining ethics because of its flawed premises. First, CSR is rooted in a relativist ethic, which is why it focuses on external projects instead of right and wrong. Second, the notion of “giving back” to society presupposes that business took something in the first place. Third, the current CSR approach boils down to little more than a transaction cost of doing business. Companies have to pay off the greens and unions, the secularists and the Catholics, the pro-aborts and the anti-aborts, etc. It ends up being more a protection racket than an ethical framework.

CSR is flawed, but what is the true social and moral responsibility of business? The rich tradition of moral theology and natural law can guide us in this regard. In a commercial society, business plays an important role in the common good and in shaping society’s norms, ethics and values. What then does an ethical and socially responsible business look like? An ethical company must be honest in its dealings, follow the laws and regulations of the state and, beyond that, the moral law. Employers must also treat their workers with respect, pay fairly, provide a safe working environment, allow employees ample time to spend with their families and to rest and worship God.

Other duties include helping to maintain a just, free and competitive market economy that enables new entrepreneurs to compete — even at the expense of losing market share. This is a challenge especially when businesses grow and begin to have more access to state and federal regulators. Business people tend to like competition when they are small and have no political connections, but once they become bigger it’s important to resist the temptation to shift the market unfairly in their favor.

Businesses also have the responsibility to help maintain and develop a moral ecology that encourages virtue. Marketing and advertising do more than just sell products, they create and influence culture, attitudes, habits, beliefs and standards. Business leaders need to be responsible with this power and not engage in campaigns that resort to vulgar or sexual imagery; that undermine family life or parental authority; that mock the good, the true, and the beautiful; or that take advantage of children.

In Born to Buy, Juliet Schor documents the billions spent on marketing to children with the goal of turning them into consumers at the expense of family life and their social and mental health. A consumer society is not the same thing as a free economy, and those of us who appreciate the benefits of a market economy must resist consumerist culture. Consumerism not only hinders human flourishing, it will eventually undermine the free economy.

The following are some examples of real “social responsibility” that are more difficult than giving money to the latest green fad. It might mean a loss of profit, especially in the short term. But it can be done. For example, Omni Hotels decided in 1999 that it would no longer make porn available at its hotels. A spokesman called it a “moral decision,” recognizing that porn is a moral evil that exploits women and has disastrous effects on men. In the end, Omni ended up attracting religious gatherings from the likes of Billy Graham Ministries, TD Jakes and others.

A free, entrepreneurial and competitive market economy is the best means to create prosperity and bring about widespread distribution of wealth. But a free economy does not just pop out of nowhere. It requires a certain institutional and cultural framework — private property, rule of law and free exchange. Equally important, however, are moral virtues such as honesty, thrift, hard work, delayed gratification, long-term thinking, and a desire to serve others beyond mere economic exchange. Free economies also require certain kinds of people. A society of rational maximizers concerned only with making a profit — or stupefying others through porn and vulgarity — lacks the character and virtue to sustain a market.

Business leaders cannot save the world. Only Jesus can do that. But in its own sphere of the market, business plays a key role in shaping culture. Business leaders need to decide whether they want to take the easy road and promote the latest social trend or whether they will accept their real social and moral responsibility. A lot more than they realize rests on their decision.

Michael Miller is the Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.

Dealing with society’s four crises

The Acton Institute’s Michael Miller writes that the world is going through crises of reason, truth, freedom and beauty. The current financial and moral crises in our culture are symptoms of the four greater crises. He argues that Pope Benedict has been addressing these four major crises throughout his pontificate — and that there is hope . . .

Dr. Michael Miller

It seems that society is moving from one crisis to another lately — a breakdown of morality in business, an enormous financial crisis, social and familial breakdown, the scandal of abuse in the Church and an ever-growing government taking a bigger role in our lives.

Our time and its troubles are not unique. Every age has its crises. No perfect time has ever existed, and each generation is called to be stewards of their time. While the challenges I mentioned are serious, they are not the key problems of our time. They are manifestations of more significant civilizational crises that must be addressed if we’re going to see the current challenges clearly. Pope Benedict XVI has been addressing these deeper crises throughout his pontificate.

First is the crisis of reason. As the Pope discussed in his now famous Regensburg Address, we have limited our concept of reason to the empirical. Under this limited notion, anything that cannot be demonstrated empirically — by mathematical or scientific experiment — is not considered rational or reasonable. This means that all discussion of truth, goodness, beauty, right or wrong is relegated to the realm of emotion or opinion. Yet this position is untenable because it’s impossible to demonstrate empirically that reason should be limited to the empirical. As Benedict has argued, we must expand our concept of reason to include logical and moral reasoning. To limit it is irrational.

The second crisis is the rejection of truth — or what Benedict appropriately called a “dictatorship of relativism.” We’re all familiar with the person who argues that truth does not exist. Saint Thomas Aquinas dealt with this objection centuries ago. If a person says there’s no such thing as truth, we must ask a simple question: “Is that true?” To argue that truth doesn’t exist is a self-refuting proposition. Some may protest that that is the only truth, but that of course makes two truths!

The same applies to the person who says “The truth may exist, be we cannot know it.” “Really? Do you know that? If you do, then you know at least one truth.” This isn’t a word game. It’s the nature of reality. Truth, Aquinas wrote, is “conforming one’s mind to reality.” To reject the existence of truth is to ultimately reject the intelligibility of reality. Yet think what the limitation of reason and rejection of truth does to morality. If truth does not exist and all value judgments — right, wrong, just, fair, etc. — are non-rational, then how can we to expect people in government or businesses to be concerned with anything more than serving their own petty interests at the expense of others?

The third crisis flows from the first two: a crisis of freedom. Many people view freedom as merely the ability to exercise one’s will in whatever manner he likes. But as Benedict wrote: “An irrational will is not free.” If I start banging my head on the edge of a table or poking myself with a fork, no one would think, “Wow, that guy is so free!” No, they would think I had lost my mind, because freedom unhinged from truth and reason is not free. Think of all of the broken marriages, lying, stealing, abuse, harm and sadness that have come from this deceitful (and irrational) concept of freedom. To paraphrase C.S. Lewis, we have created a tyranny of tolerance and the result is generations of damaged lives.

The fourth is a crisis of beauty. Beauty has been reduced to merely being “in the eye of the beholder.” We have taken a partial truth — that the unique nature of persons means that each individual is going to perceive a certain work of art, a landscape or piece of music differently, and thereby be able to contribute a new perspective to his fellow man — and turned it into the idea that beauty is merely a matter of opinion. We’ve turned the sublime into the banal.

This may not sound very important, but it has a host of serious consequences. One is that the grotesque, the ugly, the disgusting and the shocking are now placed on the same plane as the lovely, pretty, beautiful and sublime.

Plato believed that if we lost the ability to say what was beautiful in art and music, education itself would be compromised. Do we think that when St. Paul exhorted us in his letter to the Philippians to think about whatever is true, beautiful, noble, gracious, lovely and excellent, he was merely telling us to reflect on our own banal subjective feelings? No, he was calling us out of ourselves and into a life of excellence rooted upon the foundation of Christ.

What can we do? The ironic reality is that we as individuals cannot do much about the financial crisis, immorality on Wall Street and in Hollywood, or the growth of government. But we can do a lot about the civilizational crises. We can do a lot within ourselves, our families and communities to think clearly, to think like Christians, and to recreate a Christian culture. We can teach our children, and we can “renew our minds” in Christ. One person at a time, this will change the culture, business, politics, economics and the Church.

Michael Miller is the Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.

The victory of socialism?

Michael Miller writes that we may have relegated socialism to the “dustbin of history,” but socialism never actually died. In many ways it has gained influence. The challenges of socialist thought are real. But there is hope in the resurgent resistance to the unprecedented growth of government. It’s time to rebuild a culture of ordered liberty . . .

Dr. Michael Miller

Dr. Michael Miller

The Economist marked the 20th anniversary of the fall of the Berlin Wall with the headline “So much gained, so much to lose.” As we celebrate the collapse of Communism, who would have imagined that in less than one generation we would witness a resurgence of socialism throughout Latin America and even hear the word socialist being used to describe policies in the United States.

We relegated socialism to the “dustbin of history,” but socialism never actually died. In many ways it has actually gained influence. That may sound reactionary, even McCarthyist — but only until we understand socialism the way socialists understand it.

Yes, socialist economic ideas went out of fashion, but socialism has always been more than just economics. We tend to equate socialism with Communism, Marxist revolutionaries and state ownership of industry. But socialism is a much broader vision of the person, society, equality and what it means to be free.

Karl Marx’s co-author, Friedrich Engels, saw three major obstacles to the socialist vision: “private property, religion and this present form of marriage.” Also central to socialist thought is a secular and materialist vision of the world that espouses relativism, sees everything politically, and locates genuine community in the state and not in families, churches or voluntary organizations.

The fall of Communism and two decades of globalization did not extinguish socialist hopes. The tactics changed, but the goals remained. Proponents of socialism traded in revolution for the gradualism of the Fabian socialists who encouraged use of democratic institutions to achieve socialist goals. They replaced political radicals like Lenin and Castro with the cultural Marxism of Theodore Adorno or Antonio Gramsci, who called for a “long march through the institutions” of Western culture.

This is the pedigree of Saul Alinsky, Bill Ayers and the various ’60s revolutionaries who now inhabit positions of cultural influence throughout the West. We are seeing the fruit of their efforts: Socialist visions of family, religion, art, community, commerce, and politics pervade the culture.

I’m not suggesting that Americans or Europeans live in socialist states. That would trivialize the suffering of those who lived behind the Iron Curtain. Rather, I am suggesting that socialist ideas have transformed the way many of us think about a host of important things. Ideas considered radical only 75 years ago are now considered quite normal and even respectable.

Look, for instance, at co-habitation rates and the number of people who “do not believe in marriage” or view it as a “bourgeois” institution. Directly or indirectly, they got those ideas from people like Engels and Adorno, who argued that “the institution of marriage is raised… [on] barbaric sexual oppression, which tendentially compels the man to take lifelong responsibility for someone with whom he once took pleasure in sleeping with.” The same-sex “marriage” movement and hostility to the traditional family follow Engels’ goal to destroy “this present form of marriage.”

In other realms we see increasing secularization, religion being equated with intolerance, and decreasing religious practice. Look at the common acceptance of ethical and cultural relativism and the fear of making truth claims lest one be labeled an extremist. Look at the unquestioned supremacy of the materialist and Darwinist thought that dominates the scientific community — or the political correctness that pervades language. Look at our public school system, increasingly focused on indoctrination rather than education. We joke that the universities are the last bastion of Marxism. But who do we think writes the textbooks that teach primary and high school students? The “long march through the institutions” has been more successful than its early advocates could have dreamed.

Of course it would be simplistic to blame socialism for all that ails the West. But socialism has been the principle vehicle of many of these ideas, carrying them into the mainstream.

So how is it that, after such dramatic failures, socialism continues to allure? Perhaps because — as future Pope Benedict XVI, Joseph Ratzinger, wrote — the Marxist dream of radical liberation still captures the modern imagination.

It’s a dream that will always betray because sustained liberty requires a certain moral culture: one that respects truth and conforms to it; one that recognizes the inherent dignity and spiritual nature of the person; one that respects the role of the family and encourages a rich and varied civil society; one that acknowledges that culture and religion are more important than politics; one that respects rule of law over the arbitrary rule of men and rejects utopian delusions; one that recognizes that the difference between right and wrong is not determined by majority, consensus or fashion; and, finally, one that recognizes that the ultimate source of liberty is God and not the state.

The fall of Communism in Eastern Europe was one of the great victories for human freedom. But while the East suffered untold misery, perhaps it was too easy a victory for us in the West. We were lulled into thinking that socialism had been discredited, had lost its allure — that free market economies and abundant goods were sufficient to satisfy human desires. Perhaps we should have listened more closely to those like John Paul II or Alexander Solzhenitsyn who warned us about an empty materialism, an insidious relativism and a vitiated culture.

The challenges of socialist thought are real. But there is hope. There is hope in the resurgent resistance to the unprecedented growth of government. There is hope in the millions of families who work hard and in the thousands who make sacrifices for freedom every day. As we mark the victory of freedom and the collapse of applied socialism, let us not come to a point where we look back with regret that we forfeited such a precious gift. Let us build anew a culture of ordered liberty. Let us learn from those who suffered. Let us recover the wisdom that comes from our faith and our Founders and hold fast to the fragile light of liberty.

Michael Miller is the Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.

Does Fair Trade help the poor?

The Acton Institute’s Michael Miller writes that Fair Trade coffee is touted as a way to help the poor — a win-win for everybody with heart. Many Christian organizations connect fair trade to Christian values. Fair Trade positions itself as the solution to the injustice of free trade, but in some ways it creates obstacles to free competition by artificially establishing higher prices.

Dr. Michael Miller

Dr. Michael Miller

Fair Trade coffee is touted as a way to help the poor. It’s billed as a win-win for anybody with heart. For only a slight premium on our coffee, we help poor farmers while sitting in the comfort of a café.

Many Christian organizations — Catholic Relief Services, Presbyterian Church USA and Lutheran World Relief — connect fair trade to Christian values. The Fair Trade movement argues that the free market trading system hurts the poor by paying less than equitable prices for commodities. The movement aims to empower producers to become economically self-sufficient and to promote sustainable development, gender equality and environmental protection. Producers who meet fair trade standards of labor, development, and environmental sustainability become “certified” and thus receive higher than market prices for their goods.

While all of this sounds good, it still leaves me with questions. First, what makes it more “fair” than free trade? With free trade no one is coerced to enter into an exchange. If the trade is really free, then there are no subsidies to distort the market or to protect certain industries or sectors, thereby artificially raising prices. What makes trade unfair is when countries subsidize certain industries or put tariffs on foreign products and thereby artificially lower the price domestically so that foreign producers can’t compete. This is the case with U.S. farm subsidies and the Common Agricultural Policy of the European Union. If those subsidies were removed, farmers from developing nations could compete with American and European farmers on an equal playing field. This would not only lower prices for consumers, it would generate more income in developing countries.

Fair Trade positions itself as the solution to the injustice of free trade, but in some ways it creates obstacles to free competition by artificially establishing higher prices than the market would provide. In Economics in One Lesson, Henry Hazlitt defined economics as seeing the effects of a policy not only on one group but on many and paying attention to unintended consequences.

Consider the possible unintended consequences of Fair Trade coffee. First, only certain “Fair Trade Certified” farmers receive higher prices for their beans. This means that other farmers in the area find it harder to compete. It can create incentives for corruption because it is difficult to determine whether all of the beans came from the specific “certified” farm or whether that farmer bought them at a lower price from non-fair trade farms, including farms that might use slave labor.

Second, the artificially inflated prices create incentives for people to remain in coffee farming instead of moving into industries that will be more profitable in the long run. Fair Trade also creates incentives for more people to produce coffee which could create an oversupply, creating dire consequences.

Third, does fair trade help the poor move up the value chain into activities such as processing, roasting and packaging coffee? Or do the artificially higher prices create incentives for them only to grow the beans, leaving the value-added work to companies in the U.S. and Europe?

We need to be vigilant against exploitative labor practices, and for this the Fair Trade movement should be commended. Perhaps too, Fair Trade has genuinely helped some farmers, but any long-term success seems to rely on its remaining fashionable. Like many anti-market plans that have come and gone, Fair Trade will likely hurt the poor rather than helping them.

The best way to create sustainable long-term growth is not faddish movements like Fair Trade, but the same institutions that enabled the West to grow rich: secure private property, the rule of law and free exchange. When these are in place, trade becomes fair, more people benefit from trade, and the truly fair market unleashes the entrepreneurial spirit that is the source of wealth and prosperity. Free trade and markets have lifted more people out of poverty than all the fashionable political movements loaded with good intentions but pernicious consequences.

Michael Miller is the Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.

Morality and the meltdown

Who would have imagined 20 years ago with the fall of the Berlin Wall and the end of socialism — or in the 1990s when so many made their fortunes in the new economy — that now in 2009 capitalism would be under heavy fire. The Cardinal of Westminster, Cormack Murphy O’Connor, reportedly went as far as to say that as 1989 marked the end of communism, 2008 is the year when capitalism came to an end.

What are we to make of capitalism in light of all these crises, fraud and government bailouts when even some traditional advocates of markets are supporting bailouts and seem to have lost faith in the market order? Is capitalism really to blame for all of the financial woes we now face?

Before we try to answer that question, it’s important to point out that the word “capitalism” is actually a Marxist term. While we use it interchangeably with “market economy,” the Marxist view of capitalism surprisingly still shapes the way we understand economics. The word “capitalism” gives the impression that the market is something out there — a nebulous force which can create great wealth but can also turn and harm us.

This impersonal understanding can lead us to blame markets when things go wrong instead of looking for reasons that are harder to diagnose and often reveal deeper cultural and spiritual issues. In his 1991 encyclical Centesimus Annus, Pope John Paul II specifically rejected the term “capitalism,” preferring instead “market economy,” “business economy” or “free economy.” He did this not to be pedantic but to illustrate the important truth that markets are fundamentally networks of human relationships. Understanding markets this way sheds light not only on many economic problems, but also on the underlying moral nature of markets.

Markets are the combined activities of millions of individuals, not just some guys on Wall Street. But like all human institutions, markets are not perfect and can fail. If people become overly speculative and are convinced that prices can only go up, they will violate all norms of prudence and keep buying at outlandish prices. It happened in the tulip bubble in 1637, the dot.com bubble in 2000 and the housing bubble last year. Sooner or later, reality sets in and the bubble bursts.

Markets can teach us important, though often painful, lessons about life, and we cannot separate markets from human action and human responsibility. Despite their failures, however, free markets have lifted more people out of poverty and helped create prosperity and peace than any system ever devised — so much so that even in today’s financial downturn, very few people who live in mature market economies are desolate and on the brink of starvation. Notice that markets are often blamed for the downturns, yet we tend to forget the cause of the upturn.

In these days of financial turmoil, we often hear critics speaking about de-regulation or “unbridled capitalism.” Yet both of these are straw men. Unbridled capitalism is a myth. Try to think of one country where there are no regulations on the economy or business. In fact, for free markets to succeed and be sustainable, they require a framework with rule of law, contracts, secure property rights and so on. The real question is what regulations and what level of intervention we should choose.

It’s important to remember that many of the primary reasons for this crisis are precisely an overly invasive government that created regulations requiring banks to provide mortgages to customers who could not pay back the loans, the Federal Reserve which manipulated the money supply and thus exacerbated the housing boom, and the promise of bailouts which incentivized irresponsible behavior. These are prime examples of what Friedrich Hayek labeled “the fatal conceit,” the notion that bureaucrats and politicians have enough knowledge to plan an economy better than the individuals and businesses.

Sustainable markets also require a specific moral culture. This includes trust, diligence, collaboration, honesty, perseverance and prudence. If this crisis has taught us anything, it’s the importance of morality for a market economy. Wall Street bankers took imprudent risks with clients’ money and bought financial instruments they hardly understood.

Yet instead of learning the lessons of the past, we again hear calls for increased regulation and government involvement. Some regulation is necessary, but we must not look to regulation to solve our moral problems. Here is where the realization that markets are networks of human relationships is important. If we regulate too much, we concentrate the power of markets in fewer and fewer hands. This has led to all sorts of corruption. Socialist economies, cartels, oligarchies and union-controlled industries where the price mechanism cannot function lead to stagnation and create incentives for corruption.

It is a false hope to believe that regulation will make everything right, a utopian dream that ignores human failing and is the same promise that has been peddled by the socialists. It is likewise delusional to believe that markets alone are enough. Markets require more than just efficiency, they require virtue. Our Founders taught us that political liberty could not long be sustained without virtue. The same holds true for economic liberty. Yet without economic liberty there can be no political liberty. Like liberty, the market must be moral or it cannot be.

Michael Miller is the Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich.

Business is social

There’s a lot of talk lately about social entrepreneurship and social business — the idea that business should be more focused on society and less on profit. Just this year, Nobel Prize winner and founder of the microcredit Grameen Bank, Muhammad Yunus, published a book arguing for a social business model to fight poverty in the developing world.

The idea of “social business” is fantastic marketing. What an inspiring concept: to use your business skills for the betterment of society. People are excited by the idea of imbuing their business life with social significance.

The problem is that business already has social significance. The term “social business” is redundant. Business, by definition, is social. Sound surprising? Think about it. What is a business? It is a group of individuals who work together to make goods and services that meet human needs and wants. Business must be social for it to succeed. If a business produces a fantastic product that no one wants, it won’t sell because it doesn’t have a social value. A business person must be “other directed.” The business person must be looking to the needs of individuals and families within society or he will not succeed.

John Paul II affirmed this idea in his encyclical Centesimus Annus where he stated that the purpose of a business “is to be found in its very existence as a community of persons who in various ways are endeavoring to satisfy their basic needs and who form a particular group at the service of the whole society” (#35).

Businesses do many things for society. In addition to producing goods and services, entrepreneurs invent new technologies that help grow the economy, create efficiencies so people can spend more time with their families and develop innovations that actually save lives. Business is also an important force in building a stable community where people can raise their families. Think of the disastrous effect on a community when one of its major companies goes out of business.

Working in business also helps people develop virtues that are important in social life. Think about the virtues necessary to be successful in business: perseverance, collaboration, patience, courage, charity and so on — and imagine social life without them. Perhaps the most important social contribution business makes is with regards to the family. As John Paul points out, there is a close connection between work and the family since, in one sense, work and one’s salary make family life possible.

These social benefits are not the result of some “corporate social responsibility” outreach or volunteer or charity program. This is just what happens when people do business. Business is social.

So, why are people talking about social business or social entrepreneurship? On one level, people just don’t realize the social value of their work and are looking somewhere else to find it. Now of course, some aspects of social entrepreneurship are quite good. An entrepreneurial culture that encourages innovation and addresses problems at the lowest level is a great improvement over bureaucratic approaches. However, there is an insidious element to looking outside of business for social value — a suspicion of the social import of the business enterprise that somehow sees business as fundamentally greedy.

When Muhammad Yunus advocates social business as the solution to poverty, he may be very well intentioned, but he does some damage as well. It is important to remember that business — especially within the context of a competitive market economy — is the world’s most powerful force for lifting people out of poverty. Government programs do not create prosperity, businessmen do. Yunus recognizes that foreign aid is not the answer. Billions of aid dollars are funneled into the developing world, yet poverty remains. Often, aid money makes poverty worse.

What helps a country get out of poverty is not aid; it is the institutions of the free economy: private property, rule of law and free exchange. These are not new ideas. You can find them in the thought of St. Thomas Aquinas and theologians like St. Bernadino of Sienna. Free exchange — a free market economy under rule of law — works because it allows people closest to the needs of others to meet those needs. Peruvian economist Hernando de Soto has pointed out that the developing world has no shortage of entrepreneurs; it lacks the institutional framework to enable those entrepreneurs to create wealth.

Business leaders need to be wary of asking the government for protection. Instead, they should use their economic, social and moral authority to help developing countries establish those building blocks of a free economy. This will enable the millions of men and women in the developing world to unleash their entrepreneurial talents and create value and high standards of living like we have done here.

Michael Miller is Director of Programs at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich. This article draws from Miller’s forthcoming book “Christian Theology and Market Economics” to be published by Edward Elgar Press in 2009.